THE HOTTEST new trend in the music business has nothing to do with music. Forget the rise of country, the death of disco, the mellowing of rock or the return of big bands. Celebrity licensing and merchandising is where the money is, and rock-music products have become a multimillion-dollar proposition:
Last year, Kenny Rogers fans bought $2 million worth of T-shirts featuring his gently ursine visage. Recently, Rogers unveiled a line of men's and women's Western shirts and jeans -- 30 styles of shirts and 14 types of jeans ranging from $30 to $40, with lines of hats, boots and outerwear to follow.
Last April at a Los Angeles concert, 18,000 Journey fans spent $80,000 for T-shirts, programs and related Journey products. That averaged out to $4.30 per person -- on top of the price of admission. It's not unusual for fans to spend between $30,000 and $40,000 on rock merchandise at a major arena concert.
In 1979, Rod Stewart sold $30,000 worth of T-shirts at a single Capital Centre concert. The next night in New York's similarly sized Madison Square Garden, he only sold $8,000 worth, but an estimated 150 bootleggers outside the arena managed to do three times that business. In the $100-million-a-year popmusic T-shirt and iron-on business, as much as half the revenue goes to bootleggers.
In its seven-year history, Kiss has built up a merchandising empire unrivaled since the heyday of Walt Disney. "Whatever they've earned from records," says one industry veteran, "they've matched or surpassed with merchandising. They're the single most successful group at that."
The range of products includes baseball caps, T-shirts (iron-on transfers), buttons, medallions, jackets to cover with patches, tote bags, playing cards, puzzles and school supplies, jeans, underwear, pajamas and bed sheets, paperweights with stars' pictures, decals, calendars, mirrors, wall hangings, posters and dozens more.
Executives in the image-marketing field point to Mickey Mouse and the Disney organization as the ultimate example of image exploitation. "Licensing has been the backbone of advertising for years," says Rand Merlis of 20th Century-Fox Lcensing Corp. (Kiss, "Star Wars"). "Remember Davey Crockett?" In rock, the roots are Elvis Presley and the Beatles, though Presley became a hotter property after his death that he ever was before it.
Rock T-shirts and posters started coming into wide use in the early '70s. Many American groups spawned in the mid-'60s tended to look on them as exploitative and anti-commercial. The Grateful Dead used to allow a musician's wife's friend stand in a corner of the lobby, quietly hawking her own designs. But now, "if you don't have 50 hawkers in the lobby, [the musicians] get on your back," laughs Dell Furano, who heads Winterland Productions, the merchandising company owned by superstar producer Bill Graham.
Winterland started out four years ago with a dozen acts and $2 million in sales; in 1980 they grossed $14 million working with 40 different acts, including Bruce Springsteen, Bob Seger, AC/DC, Ted Nugent, Fleetwood Mac and Heart. According to Furano, tour merchandising accounted for about half that figure; another 20 percent derived from sales to retail stores. The remainder came from Winterland's custom-printing division, which employs 90 people and whose two automated presses run off 10-15,000 shirts a day.
Many groups travel with a "merchandise roadie" who works with local concessionaires in each city, counting out the shirts ($8-12), hats ($4-10), and programs ($2-4), making sure they're all accounted for at nights end. Most concert facilities get as much as 50 percent of the gross on paraphernalia sales: For a place like the Capital Centre, which may do 80 to 100 shows a year, that's quite a windfall.
Decisions about licensing an act's name or likeness are made by group managers, or increasingly by their lawyers. "Many of these artists specifically limit the amount and type of merchandise because it's a way of presenting and maintaining an image," says Jules Zalon, lawyer for Billy Joel. Agents tend to extreme caution, and turn down far more licensing offers than they accept. "We've gotten calls wanting to put our group on rolls of toilet paper," said one agent who requested anonymity. "And that's not even the worst idea!"
There are currently about a dozen major concert merchandising companies, including Brockum International, Good Vibrations and Rock Tours Ltd. One important consideration is cost: "It's usually lower-end price merchandise," says one licenser. "Kids have to be able to afford to buy them." And many fan clubs have developed into sophisticated mail-order houses.
A T-shirt, or more recently the athletic jersey with rock logo, can be "the ultimate conversation piece," Furano says. "It's a sign of recognition, letting kids identify with the performers and the music. That 17-year-old kid has got to have a T-shirt. And it's not tied to economc conditions. In Detroit, sales are phenomenal despite the depressed economy."
Jules Zalon adds that "the concert is the big social event of the moment. When you go to Food Fair or the Shop Rite the next day, it's important to show where you were." T-shirts are the surest image-seller. In both shirts and posters, it's male figure presenting a strong image that sell best, Linda Ronsdadt being the exception. Designs on black shirts sell best, "about 70 percent of ours," says Furano. The reverse is true for sports shirts.
The biggest buyers of T-shirts tend to be on the lower end of the rock age bracket, 13- to 18-year-olds who are extremely loyal to particular groups and want a fabric badge of fandom. Heavy-metal and hard-rock groups sell best: AC/DC and Van Halen are the two big guns, though Bruce Springsteen led the pack on his recent tour. "Springsteen and Seger shows are so infrequent that they become an event," says Furano. "And these are the sourvenirs." There was some very competitive bidding for the recent Springsteen tour, and that merchandise was the hottest ticket of the fall season.
What's more important, say the merchandisers, is that audiences have now become accustomed to buying at concerts, and they plan ahead and save to get something they can wear. "They absolutely go there expecting to buy some sort of merchandise," Zalon agrees. And because money passes through fewer hands, concert venues still provide the most profitable marketplace for rock and pop merchandising. That's what enabled companies like Kragen & Co. (Kenny Rogers) to quadruple their business since 1979. Kiss and Makeup
Kiss: "in recent history, they're the most widely marketed group," says C. K. Lendt, vice president of Glickman/Marks Management Corp., a consulting firm in Los Angeles, who for the last year has been advising the group on how to increase their profitability. To date, the logo or likeness of Kiss has been used in well over 100 products including pinball machines, bubblegum, makeup kits, jigsaw puzzles, dolls, clothes, lunch boxes, a new Gene Simmons axe-bass from Kramer Guitar Co. ("just like he uses on stage") and now comic books from Marvel which sold a half-million copies each. s
Bill Aucoin, the group's manager, confirms that marketing strategy was integral to the band from day one: "We wanted to develop the characters and have them go on, and not necessarily as a rock group." A group's ability to control the use of its image is protected by the Lanham Trademark Act, which grants them the exclusive right to market articles of clothing, posters, photos and other mechandise bearing the name, trademark and likeness of the trademark holder. The Supreme Court ruled recently that those rights pass into public domain after an artist's death, a decision being fought by Factors' Inc., the Delaware poster and T-shirt firm that had exclusive rights to Elivis Presley. The Pirates
It's a trend all too familiar in the record industry: Where there's gold, the bootleggers will follow. And the product pirates, who frequently follow major tours around the country, have an advantage. They hire a local sales force which generally works without identification or vending permits. Since they don't pay royalties or licensing fees on their illicit (and frequently inferior) product, they can sell it more cheaply. Working outside the arenas, they carry only a dozen or so shirts so that loss through police confiscation is minimal; their crew chiefs sit in nearby vans, ready to resupply their "pushers."
Legitimate merchandisers and artists' representatives have fought back in the last two years by asking for strict enforcement of seizure orders, suing when they can and relying on trademark laws rather than anti-peddling or vagrancy statutes to clear bootleggers out of concert sites. At a Styx concert in New York, 30 vendors were arrested outside Madison Square Garden and their shirts seized; none showed up in court to contest the confiscations. (Styx has just embarked on a 140-date tour and expects to pull in $2.5 million from merchandising -- about one quarter of their total gross.)
Some legitimate merchandisers use detectives and undercover agents to trace pirated product back to its source. Ironically, one major bootlegger was uncovered by accident when a Kenny Rogers road manager went to the airport in Kalamazoo last spring to get some of Rogers' luggage; he was asked if he also wanted to pick up the 17 boxes of T-shirts -- which he knew nothing about. He took down the name of the sender -- Grand Illusion Designs of Schaumburg, Ill. -- and Kragen & Co. and Winterland (16 of whose artists were being bootlegged) recently reached a settlement with that manufacturer.
"But anyone with $25,000 and a bit of larceny in his heart can go out and start a new business," says Zalon. "It's tempting and very easy to get into." Bootleggers of Billy Joel products have been kept away from many recent concerts by Zalon's watchdog tactics; in New York, they've simply moved to the subways, railroad depots and major bus lines. "You couldn't isolate or prevent bootlegging around Madison Square Garden unless you had a thousand marshalls," Zalon admits. Spinning Off
While merchandisers were discovering ways of making money from rock stars, rock stars in the budget-cutting record industry suddenly found themselves needing the cross-promotion that merchandising offered. Some recent developments:
Leisure fashions. Teddy Pendergrass, Willie Nelson, Loretta Lynn and Debbie Harry of Blondie are among the dozens of performers whose names are now attached to clothes, jeans in particular. Many observers are predicting a backlash: "How many jeans can you stitch names on before people realize it's just a way to charge a higher price?" asks one nonbeliever.
Alabama, a new country-rock band with strong album sales, has opened up the first "Alabama Honey-Fried Chicken and Ribs" franchise in Birmingham. More are expected to open in the South within six months. Other groups have become associated with brands of liquor (Pur Prairie League/Jose Cuervo Tequila; Journey/Budweiser), audio equipment (Earth, Wind and Fire/Panasonic; Sea Level/JVC; Blondie/TDK Tape) and tobacco (Charlie Daniels/Skoal). Expect a flood of endorsements in 1981.
Last year, The Wrigley Co. came up with Chu-bops, miniature bubblegum records inside authentc miniaturized album covers which were sold from thousands of record shops and drug store counters. Chu-bops has already started handing out tiny gold records for sales of a million pieces.
McDonald's and Rockbill Inc. test-marketed a campaign in New York last fall in which McDonald's gave away 1 million promotional packets -- one with each purchase of an ice cream sundae. Prominently featured were the covers of new albums by Journey, the Charlie Daniels Band and The Jacksons. Each packet also included a brief band biography, complete catalogue information and a special T-shirt offer. The campaign was supported with $200,000 worth of spots on radio and television hyping both McDonald's and the groups -- by playing snatches of their hits.
In a trend sure to be widely imitated, Devo included a number of special mail-order offers on the inner sleeve of their new album. The sudden demand for items like Devo jumpsuits and shirts caught Warner Bros. without enough stock. "We couldn't meet the demand," says WB's Les Schwartz. Another successful liner marketing was the Funkadelic Army gear. In England, Abba raffled off a Volvo with coupons clipped from inside their latest album and they've traditionally included merchandising offers in their albums. New Stages
The T-shirt craze is not confined to rock, of course. Zalon -- a leader in the anti-piracy movement who has tried to eliminate bootleg Billy Joel shirts and posters -- also successfully fought bootleggers of Picasso shirts during a Museum of Modern Art exhibit in New York. "A Chorus Line" kindled the flame on Broadway, and it's common to see "Annie" or "Sweeney Todd" shirts and related paraphernalia. Many of them are probably bootlegged.
One area still not convinced of the celebrity-marketing field's future -- traditional retail outlets like Sears and K-Marts. "They're turned off, frightened of celebrity product," says Del Furano. With warehouses full of Mork and Jimmy "Dyn-o-mite" Walker T-shirts, they have good reason to fear a product's short lifespan. "But they also lump concert celebrities in that category, preferring NFL properties and generic, non-specific designs." There's also the problem of time lag; retail chains are inordinantly cautious about getting a product into a store too late.
Ultimately, says one agent, it's important to remember that artists can only use merchandising "to supplement their career, even if it's a pleasant tail on the dog. And they don't have to spend anything to get it."